Huatai Securities: The short-term focus of the central bank is to implement the package of financial policies introduced in May.

The People's Bank of China recently released the first quarter 2025 report on the implementation of China's monetary policy. According to a research report by Huatai Securities, the focus of the central bank in the short term is on implementing the comprehensive financial policy announced in May. In the future, the central bank may make decisions based on a comprehensive consideration of domestic economic fundamentals, changes in the monetary policies of the Federal Reserve, and other factors. The central bank reiterated in the report the implementation of a moderately loose monetary policy and explicitly stated that it will actively implement the comprehensive financial policy announced at the press conference of the State Council Information Office on May 7. At the same time, the central bank will flexibly adjust the strength and pace of policy implementation based on the domestic and international economic and financial situation, as well as the operation of the financial markets, especially closely monitoring the monetary policies of major central banks such as the Federal Reserve, and changes in interbank market liquidity. Looking ahead, changes in domestic economic fundamentals and the trend of factors such as exchange rates may be the main factors determining whether monetary policy can be further loosened.